Exercise 7.1 For a whole life insurance issued to (40), you are given: (i) The death benefit, which is payable at the end of the year of death, is $50,000 in the first 20 years, and $100,000 thereafter. (ii) Level annual premiums are payable for 20 years or until earlier death. (iii) The mortality basis for policy values is the Standard Ultimate Survival Model. (iv) The interest basis for policy values is 5% per year. Calculate the net premium p

Exercise 7.1 For a whole life insurance issued to (40), you are given: (i) The death benefit, which is payable at the end of the year of death, is $50,000 in the first 20 years, and $100,000 thereafter. (ii) Level annual premiums are payable for 20 years or until earlier death. (iii) The mortality basis for policy values is the Standard Ultimate Survival Model. (iv) The interest basis for policy values is 5% per year. Calculate the net premium p

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter8: Insuring Your Life

Section: Chapter Questions

Problem 6FPE

See similar textbooks

Similar questions

Consider a whole life insurance with annual premiums and a 20-year premium paying term issued to a select life aged 30, with sum insured $200,000 payable at the end of the year of death. Write down an expression for the net future loss random variable
A fully discrete life insurance policy is issued to (30). The death benefit is 1000 plus the benefit reserve at the end of the year of death. The net level premium is 150, and the reserve at the end of the second policy year is 117.875. Given that q30 = q31 = .1, determine the effective interest rate i.
4. Consider a 20-year term insurance issued to a select life aged 40 by a single premium, with sum insured $500,000 payable immediately on death. Assume mortality follows the Standard Select Life Table, with UDD between integer ages, and assume an interest rate of 5% per year. Calculate the net single premium.
You are given the following information about a person aged exactly x: = : 0.03, 9x+1 = 0.04, 9x+2 = 0.05 9x A Term Life Insurance contract with death benefit of 50,000 is set on this life, with a coverage period of n = 3 years. What is the Expected Present Value of the death benefit, if the annual effective interest rate is 8%? [As usual, a benefit is paid at the end of the year of death, if death occurs within the coverage period.] Select one: a. 5292.2 b. 5088.1 C. 6010.5 d. 4704.4 e. 4900.2
You are given: - Premiums are calculated using the equivalence principle. - Mortality follows the Illustrative Life Table. - i = 0.06 Calculate the annual benefit premium for a 30-year fully discrete term insurance on (35) with 15 annual premium payments having a level death benefit of 1000.
Finance For a special decreasing 15-year term life insurance on a person age 28, you are given: Mortality follows DeMoivre's law with w = 103. - The benefit payment is 10,000 for the first 10 years and 5,000 for the last 5 years. The death benefit is payable at the end of the year of death. v = 0.92 Calculate the level annual premium for this insurance.
Calculate the annual premium for the following policy. (Use Table 20.1.) Amount of coverage (face value of policy) Age and sex of insured Type of insurance policy Annual premium $200,000 42 (M) 20-payment life
7. A net premium of $41 payable for life will provide (x) with either $5,000 n-year term insurance followed by $1,000 whole life insurance after age x + n, or $3,000 n-year term insurance followed by $2,000 whole life insurance after age x + n. What is 1000 · Px ? A) 17.37 B) 17.47 C) 17.57 D) 17.67 E) 17.77
Calculate the annual premium for the following policy. (Use Table 20.1.) Amount of coverage (face value of policy) 200,000 Age and sex of insured 42 M Type of insurance policy 20-payment life Annual premium
A life insurance company issues a whole life annuity immediate with annual payments. The annuity is issued to (65). The annuity pays 50,000 at the end of each year for the life of the annuitant with the first payment being made at age 66. You are given: A single premium is paid to purchase this annuity. Mortality follows the Illustrative Life Table with i = 0.06. Assume that the single net premium, P, is 110% of the expected present value at issue of benefits. Calculate the probability that this policy will generate a profit using P.
3. An individual who is aged at 50 has just been involved in an accident. For the first year after the accident, the individual's mortality follows the Standard Ultimate Life Table, with a 8% higher force of mortality. After the first year, the individual's mortality follows the Standard Ultimate Life Table with no other adjustment. The individual is paid a whole life annuity-due of 10,000 per year, payable annually. Calculate the EPV of the annuity at an interest rate of 5% per year.
Find the following: (Round your answer to the nearest cent.) Face Value Age and Sex of Insured Type of Insurance Annual Premium $26,000 37F Straight Life